If you lead or manage a colocation data center, you know firsthand how difficult it can be for colocation operators to differentiate, compete, and win in today’s data center marketplace.
At the DatacenterDynamics (DCD) Colo+Cloud conference in Dallas, I moderated a panel discussion on this topic:
How small-and-mid-sized colocation operators can differentiate to compete and win in today’s data center marketplace
The panelists included
- Robert DeVita - Chief Sales Officer for 1547 Critical Systems Realty
- Liana Dunlap -- President and Founder of CoreSpace
- Jonathon Crowder -- Global Data Center and Colocation Advisor for CenturyLink
- Erik Stockglausner -- Director of Wholesales Sales for RagingWire Data Centers
For some context, when I originally began planning this discussion panel with Bruce Taylor and Giovanni Zappulo of DatacenterDynamics, it was to help the colocation provider who is struggling to stand out from the crowd.
This is a big deal because how people research and procure data center services has changed drastically in recent years. There’s so much upfront research being done that often; as much as 70%+ of the decision is already made before colo operators are even looped into the conversation.
This is a huge hurdle but also an excellent opportunity for colocation providers that attract the right people early enough, in the right channels, and in the right context to be seen as a highly-differentiated trusted business advisor.
Here are my key takeaways from the panel discussion:
- Colocation is defined as the physical layer of space, power, and connectivity and an outsourced, multi-tenant data center environment with some specialized services.
- 95% of 1547 Critical Systems Realty’s revenue is from colocation customers. Of that: 70% is wholesale, and 30% is retail colocation.
- 90% of RagingWire Data Center’s revenue comes from multi-tenant colocation.
- 40% to 50% of CoreSpace’s revenue comes from colocation clients.
- The most important factor is to have synergy between sales and marketing.
- Your salespeople rarely get in the door to speak to a C-level executive.
- If 70% of the qualification occurs prior to sales engagement, it may make sense to divide your sales and marketing budget accordingly.
- Your marketing team should meet with members of your sales team and ask how marketing can help sales. This way, your sales reps and sales managers are involved with and influencing messaging and event planning.
- Ask your clients what they think differentiates you. Listen to your clients to understand what is important to them.
- Potential clients must get to know your team during the last 30% of the buyer’s journey.
- Use role-specific language on your website. Give your audience an option to identify their role so they see the most relevant content. This helps you understand who is involved in the buying process, who might be qualified or not, and who’s missing.
- The clients that scream the loudest are generally the hardest to deal with. They tend to consume most of your employees' and company's resources -- and are generally the ones that want discounts.
- The more flexible we are with customers, the fewer unhappy customers we will have.
- Be a subject matter expert and come in prepared.
- The most important thing in sales is a four-letter word: CARE. Understand your customer's businesses and their challenges.
- Target specific clients. Know what they’re looking to accomplish and what IT changes they want.
- Know who knows about your deal before it gets to you. Triangulate the deal because there are different internal units that deal with hardware and carriers before clients get to you for the space and power.
- Try to get a 360-degree view of the environment and ensure you’re not just dealing with one person.
- Managed service providers (MSPs) offer a natural channel because they touch the client in ways that colocation providers don’t.
- On the retail colocation side, traditional master agents and their subagents do most of those deals.
- The best way to get time with executives -- CEOs, CFOs, and CIOs -- is to find out who they like to deal with from the executive.
- Meet with like-minded salespeople with similar values that believe what you believe. Don’t try to make everyone a partner. That dilutes the whole purpose of a partnership.
- Certain small business owners will get lost if they go to a big colocation data center company.
- There is a potential for salespeople to dilute and further complicate the sales process when they can’t differentiate themselves enough.
- 70% is relevant in the wholesale market, but it’s much more word-of-mouth. You either have a reputation for doing it, or you don’t. If you don’t, then you’ve got a battle in the last 30%.
- You’ll see cloud service providers become the largest consumers of data centers, which they are now. I don’t see them stopping anytime soon.
- The edge continues to go where the users are, going into emerging markets.
- Cloud service providers are soaking up all the capacity.
- Some colocation providers will try a cloud pricing model for colocation to make them relevant and differentiate themselves.
- The big, large enterprise data centers on the market today will get sold for pennies on the dollar.
- The CIO’s influence will become smaller, and the CFO’s influence will become larger.
- It is very difficult to sell to any government entity.
- The salesperson never loses on a price. Never. They always lose because they got outsold. Price is an excuse. If you have the right relationship with your client, the client will say we really want to do business with you.
- Pay attention to what goes on with your competitors in the market. And if you see that there’s change happening, there’s an opportunity to go in and say, “Hey, you know what? Your data center is turning over, turning over ownership, and we’d like to talk to you.”
Did you attend the Big Discussion: How small-and-mid-sized colocation operators can differentiate to compete and win in today’s data center marketplace at DatacenterDynamics (DCD) Colo+Cloud? Or do you work in the colocation industry? What does your team do to differentiate, compete, and win in today’s brutally competitive data center space? Share your thoughts in the Comments section below.